Tech contract negotiations frequently involve a lot of argument about who gets to own the copyright generated. They essentially boil down to points of principle, rather than reasoned argument. Like many other complex issues, it’s worth going back to first principles. What does “owning the copyright” mean?
- You can use the copyright yourself;
- You can stop other people from using the copyright
In practical terms, for most businesses, the ability to use the copyright it without possible claims from third parties is dramatically more important than the ability to stop other people from using it. If you hold the copyright under an exclusive licence, you get both of these rights automatically anyway. Even under a non-exclusive licence, it is possible to set up a mechanism to allow the licensee to stop other people from using the copyright if they are unlicensed.
Once these points are made explicit, that part of the negotiation tends to become more straightforward (because licensing can be very flexible, and you can frequently reach a state of affairs where both parties achieve what they are looking for. (The overwhelming majority of software is written for companies’ internal use anyway: only a relatively small proportion of all code written ever finds itself licensed out to third parties for cash).
Unfortunately, ownership, even if the comfort is illusory in reality, can provide tangible benefits: for example, banks may sometimes be prepared to take security over intellectual property, and VCs may be more prepared to fund a company which owns its IP portfolio, but this is an issue for another day.
I was discussing this point at a meeting with the Cabinet Office the other day. The government seems to be obsessed by its ability to prevent other people from using copyright it has paid for. This doesn’t really stand up to much scrutiny. If government is using our tax money to create intellectual property, then why shouldn’t everyone have the ability to use it without restriction?
The US Federal Government takes this view, and by placing a great deal of information and content in the public domain, it’s not only US taxpayers, but everyone on the planet, who gets to benefit from US taxpayers. The European view treats the expenditure as an investment, and in consequence, wants to see a return on investment for the benefit of taxpayers. T
his makes superficial sense, but unfortunately, relies on flawed logic, namely that something that you can measure (licence revenue) is more valuable than something you can’t (making the copyright available to anyone). Economists (like Rufus Pollock) are increasingly developing the ability to measure the latter, but in the meantime, we are left with government policy that requires IP to assigned to the government, on the theory that it might be relicensed for money at some point (even if it never is).
This policy makes it difficult for open source companies to provide solutions to government which incorporate copyleft software (such as the GPL). If the deliverable includes code which is a derivative work of something under the GPL, then the government will not be free to redistribute without complying with the conditions of the GPL.
This tends to be regarded, at the very least, as a tricky starting point for negotiations. Of course, given that almost all software development these days (whether proprietary or open source) involves the assembly of a number of components from different sources, where the contract is for proprietary development, the bits the government actually gets rights to will, in practice, be useless in isolation, as they will need all the other (probably proprietary) components to provide a complete, functioning system.
On the other hand, the open source system may well be available for the government to distribute, in its entirety, including the operating system, database management system, web-server and so-on. The only requirement is to comply with the licences (of which the most restrictive is likely to be the GPL).
Interestingly, civil servants tend to talk about this policy as not so much “we can resell this asset we’ve bought”, but “it’s unfair that our supplier should be able to resell the asset we’ve paid them to develop”.
A policy of releasing IP under an appropriate free or open licence, or of requiring the supplier itself to do so, tackles that point, while at the same time allowing the developer (and its competitors) to benefit from providing services around the same code.
Let’s take a leaf out of the playbook of that socialist utopia, the United States, and require that taxpayer-funded IP is free for the taxpayer to use.